The U.S. and China have more work to do to reduce fossil fuel subsidies and to meet the agreement made in late 2014 on cutting greenhouse gas emissions, according to studies released this month at the G20 meeting.
The U.S. and Chinese governments released reports at the meeting of G20 nations in Hangzhou, China, showing that both countries are still heavily subsidizing the fossil-fuel industry. That report came from a December 2013 plan to participate in a peer review of each nation’s fossil-fuel subsidies.
On Nov. 11, 2014, President Obama announced a new target to cut net greenhouse gas emissions 26 to 28 percent below 2005 levels by 2025. President Xi Jinping of China jointly announced targets to peak CO2 emissions around 2030 or earlier, and to increase the non-fossil fuel share of all energy to around 20 percent by 2030, according to a White House fact sheet.
The studies released this month at G20 said that the U.S. and China have been providing over $20 billion in subsidies for fossil-fuel producers each year. That broke out to about $8.1 billion annually in the U.S. and around $14.5 billion in China.
These government subsidies are funding operations such as refining and processing oil, transporting coal, power and heat generation, and fuel-tax concessions.
The U.S. report listed 16 “inefficient’ subsidies for exploration, development, and extraction of fossil-fuel sources that could be phased out or reformed. The Chinese report found nine subsidies for similar activities. That report also included subsidies benefiting a few industries, including fishermen and taxi drivers.
The Chinese subsidy figure could be higher. That country’s report didn’t include annual cost estimates for six of the nine fossil-fuel subsidies listed, as reported by The Guardian.
The U.S. report provided additional information on related government spending benefiting the fossil-fuel industry. Some of that relates to fossil fuels used by rail or barge receiving some government funding.
The U.S. also acknowledged that the U.S. Strategic Petroleum Reserve, the world’s largest emergency supply of crude oil and featured in the photo above, is funded and operated entirely by the government. Other countries require the oil industry to pay for it, according Green Car Reports.
G20 nations came to agreement in 2009 to phase out “inefficient fossil-fuel subsidies,” while the smaller G7 group set a deadline of 2025 at a meeting in Japan in May. Congressional legislation will be required for the U.S. to cut fossil-fuel subsidies, an action likely to be put on hold in Washington for now.